May 28, 2012

By Bill Jaynes
The Kaselehlie Press

May 22, 2012 Palikir, Pohnpei, FSM-Chuuk's Environmental Protection Agency (CEPA) got its wish for an audit of their agency by the FSM Office of the National Public Auditor (ONPA) but not for the reasons they requested it. It was the first ONPA audit of ONPA since its establishment in 1993. The results were released on May 7, 2012.

According to the ONPA audit report, in February of last year, the Executive Director CEPA requested the audit so that the agency could fulfill the requirements of a Japanese Grassroots. ONPA decided that the grant amount was not big enough to by itself warrant an audit. However, CEPA has been in existence since 1993 and for a number of years has received sector grants. ONPA decided to do an audit for 2010 and 2011.

The sum total of ONPA's four findings was that CEPA is not meeting its own stated goals and that some money may have been inappropriately and perhaps illegally spent. Some of ONPA's findings have been referred to its Compliance Investigation Division (CID) which could, if it finds criminal violations send its findings to the FSM Department of Justice for possible prosecution.

In his response letter, CEPA Executive Director Ismael Mikel vehemently disagreed with nearly all of the findings of ONPA. He called the findings "clearly erroneous" and invited the FSM Congress to look into the audit priorities of the ONPA despite the fact that it was the CEPA that initially invited the auditor to look at the books.

Kind K. Kanto, who was the Chair of the Board for the audit period contained in the report, agreed with all of ONPA's findings and praised their referral of matters to CID.

Both Mikel and Kanto indicated in their responses that Chuuk's environmental laws are unrealistic and unenforceable. Kanto said that fine amounts are unrealistic with at least one law stating that the fine would be $100,000 per day that a violation condition exists.

CID will be investigating $8,000 of potentially unlawful payroll payments to the CEPA Executive Director for five months while the director was living in Hawaii. The CEPA Board had prohibited those payments but the Deputy Director signed and authorized payrolls reports to the Director despite the prohibition.

CID will also be investigating over $22,000 worth of CEPA purchases from retail stores owned by CEPA management or their family members.

The report says that CEPA management submitted a 2011 budget that included a $6,000 housing allowance for the Executive Director despite the fact that the Board had denied the director's request for the allowance. The budget was approved and the Board didn't know that the Director had received that allowance. Kanto said in his response that the board had decided that the housing allowance was inappropriate partly because the rental payments were to be made to Mikel's wife who owned and occupied the house where Mikel lived.

The Board did not review the proposed CEPA budget for the 2011 fiscal year.

CEPA has four divisions:

Conservation/Natural Resources Water and Waste Water Solid Waste and Hazardous Waste Technical Support/Public Awareness

Total budgets for the audit period were tiny. The agency that is responsible for environmental protection issues in Chuuk's "11 mangrove-fringed islands" and "14 low island atolls outside of the lagoon" as the ONPA report phrased it, has only 11 employees including the two top management positions to handle the monumental task. In 2010 the Agency's budget was $285,242 and in 2011 the budget was $349,273. That money was provided by environmental sector grants from the Compact of Free Association with the United States which, since 2005 provided over $3 million in grants to CEPA.

In 2004 the FSM in consultation with State EPA's developed nine strategic goals as part of the FSM's Strategic Development Plan (SDP). CEPA, like other FSM State EPA's were responsible to work toward the accomplishment of the nine goals. In 2009 FSM departments developed a detailed five year Environment Sector plan. States agreed with the SDP goals "and CEPA was again responsible to work toward accomplishment of all nine strategic goals," according to the ONPA report.

But the audit found that CEPA did not staff operations and did not initiate budget proposals for full implementation of six of nine Environment Sector goals under the SDP.

The ONPA audit also concluded that CEPA has not enforced many environmental laws and regulations and that as a result Chuuk's environment continues to be in danger from illegal environmental practices.

"The auditors found some instances of 'cease and desist' orders being issued by CEPA for offenses, but CEPA did not follow through to ensure compliance or to levy fines and penalties through the two years tested by the auditors and likely for much longer," the audit said.

The report included three pages of pictures that demonstrated CEPA's negligence in enforcing its environmental protection mandate. The pictures show examples of the kind of environmentally damaging practices that continue to exist in Chuuk. The photos in the report were taken only on Weno, the State Capital.

They showed examples of illegal dumps, oil spills, sewage flowing into the streets, and unauthorized dredging and land expansion. They were but a few examples of environmental degradation that CEPA might have been able to stop including "dynamite fishing" had they enforced the laws and regulations for which they are responsible.

ONPA recommended that CEPA management should "exhibit a stronger will to:"

In its third finding ONPA found that required quarterly reports were not used effectively, a seemingly duplicative finding. But the auditor said that the reports, which are a quarterly requirement of the U.S. Office of Insular of Affairs which manages the sector grants, were compiled by division managers and that CEPA upper management did not review or sign off on the reports. Reports went to State and National budget offices and the FSM Office of Environmental and Emergency Management (OEEM) was not consulted and not included in the distribution of the reports.

"Significant issues facing Chuuk were not reported in the quarterly reports," the ONPA audit said. For instance the reports centered primarily on activities conducted in Weno with a small sample of activities conducted in a few of the lagoon islands.

The audit said that the performance of some of the activities reported were unrealistic. "For instance," ONPA cited as an example, "one of the activities to be performed by the division of Water and Waste Water was the testing of water quality (in Weno), yet the island-wide power outages which were constant throughout the two years that we audited, caused the test results to be meaningless.